Oil Plunges As Russia ‘Throws Cold Water’ On Bull Thesis

First thing this morning, we noted that crude fell off a cliff just after 4:30 a.m. EST.

That move lower was blamed on Brent’s inability to move above $50.

Whatever you want to say about it, the fact is that it came on the heels of oil slamming on the brakes after its longest run of gains this year (for Brent the longest run since 2012), a run which itself followed crude’s collapse into bear market territory last month.

Between news that OPEC production rose to its highest this year in June and Russia refusing to back any proposal for deeper production cuts, the tone has turned decidedly bearish again.

Oil exports by the Organization of the Petroleum Exporting Countries climbed for a second month in June, Thomson Reuters Oil Research data showed.

OPEC exported 25.92 million barrels per day (bpd) in June, up 450,000 bpd from May and 1.9 million bpd more than a year earlier.

The rise in exports comes despite OPEC’s vow to rein in production until March 2018 and follows hot on the heels of Reuters’ monthly OPEC production survey which found output jumped to a 2017 high last month as OPEC members Nigeria and Libya continued to pump more.

Writing about a subject is the best
way to educate yourself about it, and when I flick through past work I remember how much
they taught me, if no one else. Mainly they taught me that I didn’t know very much. But they
also taught me that most other people didn’t know much either. Thus, some key themes
which stand out include the illusory control of policy makers, the presumed knowledge of
those looking to them to actively do good, the ease with which we fool ourselves, and how
best to protect capital in the face of such unavoidable uncertainty. -- Dylan Grice